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Has the Silver ETF now bought all remaining silver

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Interesting post on Kitco.

 

The Silver ETF is unable to buy anymore Silver

 

-------------------------------------

Got Gold? 05-18-2006 07:29 PM

 

The Silver ETF is unable to buy anymore Silver

NYMEX

Total Registered

72,432,321

http://www.nymex.com/sil_fut_wareho.aspx

 

iShares

Ounces of Silver in Trust

69,992,918

http://www.ishares.com/fund_info/de...equestid=118245

 

Its over folks. No more Silver is left at Comex. Unless we see higher prices. And we're talking only 3 million more.

-----------------------------------------------------

 

THE MYSTERY OF THE SILVER ETF

 

We have seen the SLV ETF increase their silver holdings by 50 million Oz since their launch a couple of weeks age. My understanding is that before the ETF the total amount on COMEX was around 130 million Oz and Warren Buffet held around 130 million Oz which he has since disposed of (possibly under duress).

 

I suspect Buffet actually agreed to sell his silver to the Barclays ETF for a fixed price on a draw down basis as the ETF grew ensuring the ETF could function with some independance from COMEX manipulation.

 

The main point is that if the ETF continues to buy ata rate of 50 - 100 million Oz per month it would eat up the words entire supply ofavailable silverwithin the next couple of months !!

 

Date Total Ounces of Silver in the Trust

04/28/2006 20999768.8

05/01/2006 20999768.8

05/02/2006 31998959.2

05/03/2006 38498421

05/04/2006 41998082.9

05/05/2006 43997857.7

05/08/2006 48497173.7

05/09/2006 53996254.1

05/10/2006 58495445

05/11/2006 61994777.9

05/12/2006 64994165.9

05/15/2006 68993200.3

05/16/2006 68993200.3

05/17/2006 69992917.7

 

I plan on buying some SD35 Silver calls in the next few days. Any corrections to my assumptions or comments welcome.

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The Launch of the ETF has heralded a peak in Silver.

 

Gold peaked about 3 weeks after the luanch of its etf, and something similar has happened with silver

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The Launch of the ETF has heralded a peak in Silver.

 

Gold peaked about 3 weeks after the luanch of its etf, and something similar has happened with silver

 

I agree that anticipation of the ETF launch caused a spike in silver which has fallen back as people sold on news, the question is will we see the previous peak eclipsed as demand by the ETF eats up the worlds supply of silver. How long can the ETF keep increasing its holdings when it is already having a significant impact on the amount of available silver?

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The Launch of the ETF has heralded a peak in Silver.

 

Gold peaked about 3 weeks after the luanch of its etf, and something similar has happened with silver

 

Yes, it's amazing. Everyone said (on your ADVFN gold and silver threads) that silver, like gold, would rise in anticipation, peak shortly after and then fall. Yet they still didn't manage to trade it right and got their fingers burnt.

 

Proof that even if you call the market right, trading it right is another matter.

 

Football, stand-up comedy and film making are three areas where 'everyone's an expert'. Everyone knows. Everyone could do it better. Yet only when they sit down and actually try to do it themselves do they realise how difficult it is. How even a lifetime dedicated to it will not necessarily mean success. Trading is the same.

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I agree that anticipation of the ETF launch caused a spike in silver which has fallen back as people sold on news, the question is will we see the previous peak eclipsed as demand by the ETF eats up the worlds supply of silver. How long can the ETF keep increasing its holdings when it is already having a significant impact on the amount of available silver?

 

The launch of the ETF was one thing what about its likely impact on future price of silver up or down and how long ?

 

The ETF now holds 70 million Oz thats around half of Buffets 130 million Oz. I suspect we will see the price of silver explode once the ETF starts being forced to buy from the 130 million held by COMEX, this could happen in the next couple of months. When the ETF holdings reach 130 million we should start to see the sparks fly :rolleyes:

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Guest Guest
Football, stand-up comedy and film making are three areas where 'everyone's an expert'. Everyone knows. Everyone could do it better. Yet only when they sit down and actually try to do it themselves do they realise how difficult it is. How even a lifetime dedicated to it will not necessarily mean success. Trading is the same.

I suppose you are very right, Frizzers.

 

Today I sold my first ever trade for a small loss. I bought gold at $575 and about $640. I recall logging on at work and seeing $725, and thinking "I could sell now and make £500". I seriously considered it at that point, even feeling that was the top (for the time being at least!)

 

But despite Moneyweek and Dr Bubb's recent warning and my feelings, I held.

 

After the first drop I thought "this might be all that happens on this correction". Today's action has convinced me that this might not be all that happens on this correction.

 

Ho hum.

 

:rolleyes:

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I suppose you are very right, Frizzers.

 

Today I sold my first ever trade for a small loss. I bought gold at $575 and about $640. I recall logging on at work and seeing $725, and thinking "I could sell now and make £500". I seriously considered it at that point, even feeling that was the top (for the time being at least!)

 

But despite Moneyweek and Dr Bubb's recent warning and my feelings, I held.

 

After the first drop I thought "this might be all that happens on this correction". Today's action has convinced me that this might not be all that happens on this correction.

 

Ho hum.

 

:rolleyes:

 

That was me ^^^ (Bubb's forum works differently and I don't get prompted to log in)

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I suspect a decent portion of the silver accumulation is switching of existing longs into the allocated ETF.

 

As as aside Silver seems to have turned a corner today, more than holding it's own amidst the Gold carnage. I'd be surprised if we didn't have at least one more look at today's lows in gold and silver...most probably in Tokyo time.

 

Question - are collapsing equities good or bad for metal prices?

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We have seen the SLV ETF increase their silver holdings by 50 million Oz since their launch a couple of weeks age. My understanding is that before the ETF the total amount on COMEX was around 130 million Oz and Warren Buffet held around 130 million Oz which he has since disposed of (possibly under duress).

 

I suspect Buffet actually agreed to sell his silver to the Barclays ETF for a fixed price on a draw down basis as the ETF grew ensuring the ETF could function with some independance from COMEX manipulation.

 

 

This is interesting because I read somewhere, I think the link to it is on the thread about Buffett, that he had sold his silver, but his quote said that he bought it and sold it too quickly missing out on Silver's rise in recent years. He didn't give the impression that he sold recently. Perhaps he was trying to hide something, the canny old man.

 

Here's the link.

 

"Discussing commodities, Mr Buffett said he detected speculative participation in the recent run up in prices, particularly metals. He added that Berkshire had not benefited from the sharp rise in silver prices, despite at one time owning a lot of the metal.

 

"I bought it very early, I sold it very early. Other than that it was perfect," he joked."

 

http://www.msnbc.msn.com/id/12665304/from/RSS/

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This is interesting because I read somewhere, I think the link to it is on the thread about Buffett, that he had sold his silver, but his quote said that he bought it and sold it too quickly missing out on Silver's rise in recent years. He didn't give the impression that he sold recently. Perhaps he was trying to hide something, the canny old man.

 

Here's the link.

 

"Discussing commodities, Mr Buffett said he detected speculative participation in the recent run up in prices, particularly metals. He added that Berkshire had not benefited from the sharp rise in silver prices, despite at one time owning a lot of the metal.

 

"I bought it very early, I sold it very early. Other than that it was perfect," he joked."

 

http://www.msnbc.msn.com/id/12665304/from/RSS/

 

Here is a link to a great article posted to my thread on Kitco well worth a read:

 

FMNN - WHY SILVER PRICES MUST RISE - Monday, May 08, 2006

 

...........In sum, the fundamentals will likely stay in place for a long, long time to come. It will take years for new mines to come to production, and produce enough silver to cool off the investment panic that is now just beginning.

 

In the past, when silver was plentiful, about 100 years ago, a silver dime, quarter, or dollar was a day's wage. Due to the shortage, such a small amount of silver could well be worth a week's wage in the future.

 

The real fundamental is that paper money is fraud. It is a failed promise, a broken promise to deliver silver or gold. Very soon, in my opinion, the last form of paper promises to deliver silver or gold will also fail. At that point, people stop believing promises, and people will turn to gold and silver, which are not promises, but payment in full. And that kind of fundamental shift in awareness can last a generation.

 

There is no need to fear a price spike in silver, or a drastic drop. The bigger fear ought to be that even though you know all of this, silver prices will rise swiftly past $100/oz., before you decide to buy all that you want, and will continue to grind ever higher, for decades to come.

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IShares silver ETF (SLV) have now increased their holdings by another 15 million Oz to 87 million Oz since my first post last month.

 

Silver Trust (SLV)

 

Question is how much more do they need to buy before the market picks up on the fact that there is only a limited amount of silver left. What will be the tipping point signalling the start of a silver bubble where silver breaks its link with gold?

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Could the ETFs provide an explanation why the current gold rally has not been reflected in the price of mining stocks ?

 

The Daily Resource 7/14/06:

 

...Julian Phillips, of GoldForecaster.com, wrote yesterday on the sea change in metals trading brought about by the ETFs: “In the days of yesteryear … most investment funds were just not permitted to hold physical gold or any other metal. So the market remained very limited until the advent of the gold Exchange Traded Funds.

 

“As you know it is the ‘marginal’ demand that swings a price. Well, in the gold market the balance between demand and supply has been narrowing over the last few years. This has meant that the base for any newcomers to gold to buy from, has been reducing. So, from the outset the Exchange Traded Funds have solidly, irresistibly, absorbed a huge chunk of the available supplies in the market …

 

“But now, suddenly institutions that had only ever gone into gold through gold mining shares could now buy into gold itself! It is amazing to think that no matter how many gold shares institutions bought previously their buying power had absolutely no effect on the gold price, whatsoever! They were therefore merely passengers on the gold price train.

 

“The E.T.F. has changed all that, far and away more than the formulators of the funds realized! They wanted to expand the Investor base of gold primarily to include the huge mainstream investment fund parked in Pension funds and mutual funds who simply could not buy gold before. But what this concept did was to bring the past passengers and brand new investors into the driving seat!

 

“Now, an investment in the shares of a gold E.T.F. affects the gold price itself! It is vital to understand this point! In time these Investors will have a greater effect on the gold price than all other Investors …

 

“Has this new demand peaked? By no means! One report tells us that the bulk of funds that may come into these E.T.F.’s is still watching and waiting until its gold holding have increased to the level that supplies the needed liquidity to move in and out of the market with relative ease …

 

“But well before then the institutions will move money in, in smaller but rising amounts and keep adding to it as the global economic and gold metamorphosis continues and the funds capacity can accommodate them.”....

 

SLV holdings now 91,417,377 Oz ;)

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So should we buy or sell silver.

Im not clued in on what an ETF is or does.

 

Isnt it more sensible to actually own the silver in coin form, or am I being stupid again?

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whats the ETF?

 

if they are buying all the silver surley they can sell all that silver when the price is right and where will that leave all those folk that just bought...?

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Could the ETFs provide an explanation why the current gold rally has not been reflected in the price of mining stocks ?

 

The Daily Resource 7/14/06:

SLV holdings now 91,417,377 Oz :o

 

Profile as of 08/30/2006 (Most recent baskets)

Total Net Assets $1,226,025,928 Ounces of Silver

in Trust 100,368,644

Shares Outstanding 10,050,000 Tonnes of Silver

in Trust 3,121.8

 

http://www.ishares.com/fund_info/detail.jh...equestid=157286

 

 

SLV now holds over 100 million Oz wite just 10 million Oz outstanding - what happens once they reach that limit ?

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Could / should force the price higher,

if it is working as advertised

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Maybe they could lease out some of the empty space in Fort Knox :D

 

I was thinking that myself. ;)

 

There is still this mystery about where all this silver came from for the silver ETF. It has been suggested that it came from Buffett, but I have also read that he claimed to have sold his silver early and didn't make much on the trade. Is Buffett telling a little white lie? Unless I've missed something, does anyone have the answer to this? The sale must be recorded somewhere.

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Have now received reply from iShares, in response to my question about what iShares are planning to do once the remains SLV shares are sold.

 

It sounds to me that once the remaining 10 million Oz left for sale in the silver ETF have been sold, probably in the next three weeks, the ETF will start purchasing silver on the COMEX to meet the demand it has generated from large players such as pension funds and the like. If we assume a continuing demand of around 5 million Oz per week we could see the 110 million Oz of silver available for sale on the COMEX eaten up in around 6 months !!!

 

Thank you for your interest in the iShares Silver Trust sponsored by Barclays Global Investors International.

 

If there is a demand for SLV and not enough shares, the market makers will get involved by depositing more silver into the Trust. The Trust will in turn create new shares of SLV that will then get traded in the secondary market. Each share of SLV represents 10 ounces of silver. To help clarify your questions, we have attached a link to the SLV website. Please review the FAQ for more details.

 

Registered representative of SEI Investments Distribution Co. Certain funds, including the iShares Funds, are distributed by SEI Investments Distribution Co. (SEI). Securities are marketed by BGIS, a subsidiary of Barclays Global Investors, N.A. which is an affiliate of Barclays Bank PLC (BBPLC), none of which is affiliated with SEI. The iShares Gold and Silver grantor trusts are sponsored by Barclays Global Investors, N.A. and Barclays Global Investors International Inc., respectively, each of which is a subsidiary of BBPLC. The Gold and Silver grantor trusts are not investment companies registered under the Investment Company Act of 1940 or commodity pools for purposes of the Commodity Exchange Act. The iShares GSCI® Commodity-Indexed Trust, a commodity pool as defined in the Commodity Exchange Act and the applicable regulations of the CFTC, is sponsored by BGII, a commodity a pool operator registered with the CFTC. For current prospectuses for all iShares products, go to http://www.ishares.com/misc/prospectus.jhtml

iPath Exchange Traded Notes are issued by BBPLC and promoted by BGIS. For a current prospectus, go to http://www.ipathetn.com/prospectuses.jsp

 

Neither Barclays Bank PLC and its affiliates, including Barclays Global Investors, N.A. and Barclays Global Investors Services, nor SEI and its affiliates, provide tax advice. Please note that (i) any discussion of U.S. tax matters contained in this communication (including any attachments) cannot be used by you for the purpose of avoiding tax penalties; (ii) this communication was written to support the promotion or marketing of the matters addressed herein: and (iii) you should seek advice based on your particular circumstances from an independent tax advisor.

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It sounds to me that once the remaining 10 million Oz left for sale in the silver ETF have been sold, probably in the next three weeks, the ETF will start purchasing silver on the COMEX to meet the demand it has generated from large players such as pension funds and the like. If we assume a continuing demand of around 5 million Oz per week we could see the 110 million Oz of silver available for sale on the COMEX eaten up in around 6 months !!!

 

An exciting prospect. I check the COMEX warehouse stocks every day - not prepared to go all-out short term bullish on Silver until these start to drop. When they do, if the funds get in on the action, you could see silver double in a matter of months like we've seen with copper and Nickel. In this situation I may be very tempted to start buying some physical as well, as it could be the start of Ted Butler's "silver to the moon" scenario, and I don't want to lose out if Comex contracts start defaulting!

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Todays response from iShares suggests to me that the limit is not fixed in stone it only represents the limit of silver thay are able to draw down via the agreement I suspect they have had with Buffet. Once that limit is reached they will start buying from COMEX, providing a mechanism for the big players to feed on the small silver market and acheive something that Buffet could not acheive on his own.

 

http://www.gold-eagle.com/editorials_05/hommel032106.html

 

"..............I have heard from several reliable sources over the years that Warren Buffett was prevented from buying any more than the 129.7 million ounces of silver he acquired for his fund. I heard that the U.S. government basically told him, "You can't buy any more silver. We won't let you. You may win the battle on silver, but your other insurance businesses that require licenses, will be revoked, and you will lose the war if you go to war with us on this." One source was a merchant banker who contacted Warren Buffet's people for the purpose of trying to convince Warren to buy gold stocks, back in about 2000. Another source is a prominent newsletter writer that I follow. And I've heard the same thing from other sources, too.

 

Other particulars about Warren's silver are that it is stored in London, and that he was not able to receive full delivery of all of his physical ounces of silver. He didn't exactly lease out the silver that he never received, but he did allow those who had shorted him the silver, more time to deliver, which is something similar...........

 

..........My point is that if Warren used some of his silver to back the Silver ETF, he may have done this for a good reason: to help other large funds, like Calpers, buy silver! The point is that a Silver ETF has a legitimate reason to go into the market to acquire more silver for the fund, whereas Warren Buffett (and Birkshire Hathaway) may be blocked from buying any more silver.

 

So, my conclusion is that the approval of the Silver ETF may not cause an immediate shortage in the silver market by the time it starts trading on the AMEX, under the symbol, "SLV". But longer term, say, in the next year or so, we should expect silver prices to rise significantly, as $200 billion dollar funds like Calpers (and thousands of other such funds), finally have a way to buy silver.

 

Silver should rise significantly, because if there is only about 100 million ounces, then, at $10.50/oz., that's only about $1.05 billion dollars! By the time $2 billion dollars of investment demand tries to buy silver, you probably won't be able to imagine how high silver prices will be."

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The Buffett "did he sell all that silver recently or didn't he" mystery continues.

 

"The recent revelation that the renowned investor Warren Buffett sold his silver was a mega-event. It was big news when Mr. Buffett bought silver some 8 or 9 years ago, and its sale is also big news. Let me state the facts as I know them, and then I’ll speculate.

 

Mr. Buffett always said he would make it known when he sold his silver and he kept his word, using the occasion of his company’s annual meeting to tell of the sale. While he did not reveal the exact amount, time and price of the sale, he indicated that he "sold too early" and did not profit from the sale. I found that very surprising and particularly unusual for Buffett."

 

http://www.investmentrarities.com/weeklyco...ry05-08-06.html

 

Part of an interview with Ted Butler

 

Butler: Yes. I think the silver that has gone into the new ETF was formerly inventory against which silver futures were shorted and traded against on the COMEX for years and years. There are now 73 million ounces in the ETF, or the equivalent of 15,000 contracts. I’m convinced that represents 15,000 contracts that won’t be shorted again by the silver wolf pack, adding to my sense of no big shorting on the next rally

 

Cook: Could that have been Buffett’s silver?

 

Butler: Sure, indirectly at least. But it wasn’t Buffett selling at $13 or $14, according to his own statements. I hope it is Buffett’s silver as that would indicate how little silver remains aboveground.

 

http://www.investmentrarities.com/05-23-06.html

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